Greetings from CEO

The business developed as expected and the risk management action plan is progressing

OmaSp's business development has continued as expected during the third quarter. The development of both main sources of income was in line with expectations. Significant investments in the development of risk management processes continued and the implementation of an extensive action plan proceeded as planned, which in part increased costs in the third quarter. Despite the investments, the Company's comparable cost/income ratio remained at a good level at approximately 37 percent. Key events during the third quarter were the completion of the acquisition of Svenska Handelsbanken AB's SME businesses in Finland. In the acquisition, approximately 10,000 new customers were transferred to OmaSp. In addition, the product range of the card business expanded, and a new KBusiness Credit card was launched for SMEs in cooperation with K Group.

As a result of lower market interest rates, net interest income growth halted as expected in the third quarter and net interest income decreased by 4 percent to the comparison period of the previous year. Net interest income has grown by 16 percent during the beginning of the year. In the third quarter, the level of fee and commission income and expenses remained at the previous year’s level, and for the beginning of the year, the growth amounted to 7 percent compared to the previous year. Comparable operating income decreased by 3 percent during the third quarter.

The credit and deposit stock grew due to volumes transferred from Handelsbanken. In other respects, the development was affected by the continued weak market situation and the Company's focus on implementing the action plan.

During the third quarter, a lot of work has been done to resolve the shortcomings in risk management that emerged in spring. The Company has focused a significant amount of both internal and external resources on improving its risk management and quality processes. The measures will ensure a risk culture and operating practices in accordance with OmaSp's strategy in all operations. Nearly three million euros have been invested in risk management during the third quarter. Comparable operating expenses increased by nearly 22 percent during the third quarter. The Company will continue to make significant investments during the rest of the year. As part of the implementation of the action plan, a controlled winding down of the approximately EUR 240 million credit portfolio related to noncompliance with the guidelines was also initiated.

The impairment losses on financial assets remained high due to non-compliance with the guidelines. In the third quarter, impairment losses on financial assets of EUR 13.3 million were recorded. The growth is explained by reclassifications according to the calculation model, in connection with which EUR 9.2 million has been recorded as impairment losses on financial assets. Impairment losses on financial assets were recorded in total EUR 75.8 million for the entire beginning of the year, of which EUR 49.5 million is discretionary additional allowance. The comparable profit before taxes was EUR 27.6 million for the third quarter and the comparable return on equity was 16.2 percent. The total capital (TC) ratio was 15.4 percent. The development of the capital adequacy was affected by the transfer of business operations from Handelsbanken. 

Customer experience remains at the core 

Despite an exceptional year, we continue the current financial year with confidence. OmaSp's financial position is strong. Our operations will expand with the opening of new branches, and we will continue to invest in excellent customer experience and service accessibility. The news of the appointment of the CEO, announced in September, has been received with joy. We look forward to Karri Alameri starting in his position as the bank's new CEO. He brings with him strong expertise in the financial sector and stability, which OmaSp especially needs in this situation. 

Our goal is to continue to provide the best banking service in town every day for both current and future customers.

Sarianna Liiri
CEO